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Octane Fitness Inc The Power Of Focus Case Solution

Solution Id Length Case Author Case Publisher
1667 526 Words (3 Pages) Hess, Edward D. , Glinska, Gosia Darden Business Publishing : ENT-0141
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Two passionate entrepreneurs, Porth and Lee left their jobs and launched a new business venture of manufacturing elliptical exercise machines. The new venture was named ‘Octane Fitness, Inc’. Octane focused exclusively on elliptical cross trainers rather than expanding and diversifying into other fitness equipment. This set it apart from its competitors who mainly were large manufacturers of exercise equipment having broader product portfolios.

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Case Analysis for Octane Fitness Inc The Power Of Focus

Not only this, they focused their energies only on doing what they could do best and outsourced what they lacked. These key decisions that were taken at the commencement of the business helped Octane to boost and grow in to a $41 million business seven years later.

Octane’s initial funding came from the partners’ savings and from mortgaging their houses, which ultimately got increased after they got investors two years later. Since the beginning, Octane gave extreme importance to product development. The production was outsourced to a Taiwanese firm. Octane didn’t launch its ellipticals until the founders were completely satisfied with the product design; several shipments were returned to the Taiwanese firm in the process. The ellipticals were tested with the help of industry experts and tweaked with the help of their feedback. Quality control was also given huge importance as the entire firm’s reputation was dependant on the elliptical’s quality and Octane wanted to be the top producer of ellipticals in the industry.

After successfully establishing the business and receiving numerous business and consumer awards, Octane was purchased by a private-equity firm, North Castle Partners, LLC in 2005. By 2008, Octane had four different commercial models of ellipticals for sport teams, health clubs, universities, personal-training, and corporate fitness facilities. Octane also had seven different consumer models for niche market which was reached through several regional and major trade shows. Octane successfully gained 9% market share by 2008 capturing $450 million in the global market.

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